Ministers in the Lords have been preparing to accept in principle that the 299-year-old Act of Settlement is anomalous in excluding Roman Catholics, Muslims and other non-Protestants from succeeding to the throne.

Ministers were to make the admission in response to a move to repeal the act by Lord Forsyth, the former Conservative Scottish secretary.

Ministers known to support repeal include the Scottish secretary, John Reid, the first Roman Catholic to hold this post. He has described the act as "inherently discriminatory".

The revelations came as a leading Labour backbencher, Tony Wright - chairman of the public administration select committee - backed the Guardian's campaign for abolition of the act.

He described the act as prejudicial and called for its re form. Scottish Nationalist MPs have tabled an early day motion calling for repeal. Labour MPs are expected to add their names next week.

Ministers will also be forced further into the open on the constitutional controversy when they respond to a challenging report commissioned by the Home Office.

Submitted six weeks ago, it details pervasive religious discrimination and is expected to argue that laws meant to deal with this are anachronistic.

The Home Office constitution unit has written to the Guardian saying the government is still considering whether to give females equal rights to succeed to the throne.